Employees want the government to relax the affordability rule for salary revision, while BSNL’s losses keep the proposal on hold.
A nine-year-old pay dispute between employees of state-owned Bharat Sanchar Nigam Ltd (BSNL) and the Department of Telecommunications (DoT) is escalating, with unions threatening a nationwide strike demanding implementation of salary revision.
The All Unions and Association of BSNL (AUAB), a consortium of 15 employee unions of BSNL, has threatened a month-long agitation culminating in a nationwide strike on 20 November, according to a letter dated 18 September to the telecom secretary, Amit Agrawal.
The unions are seeking implementation of the Third Pay Revision Committee (PRC) recommendations for BSNL executives and non-executives. The revision, which took effect for central public sector undertakings () from 1 January 2017, has not been implemented at BSNL because the company does not meet the affordability criterion prescribed by the Department of Public Enterprises (DPE).
The clause requires PSUs to meet specified financial conditions, including profitability, before implementing a pay revision.
“Since BSNL has been reporting losses, the company does not qualify under the existing norms,” a government official said. Any relaxation of the affordability condition would require Union cabinet approval, the official said, adding that the proposal is being examined by DoT, taking into account its financial and other costs.
The unions are seeking a relaxation of the affordability condition, arguing that BSNL’s financial problems stem substantially from government policy decisions and management issues rather than employee performance.
They said workers should not be penalised for the company’s losses and wanted BSNL to focus on profitable operations and avoid taking up loss-making projects.
“BSNL is not working for profits as required under the affordability clause for implementation of third PRC and is working for implementation of all projects of government of India without looking into loss or profit,” said M.S. Adasul, general secretary of Sanchar Nigam Executives Association (SNEA), an employee association of BSNL.
Adasul made these comments during a hunger strike and lunch-hour demonstration, part of the agitation programme, on 1 October at Eastern Court in New Delhi, adjacent to BSNL headquarters. The protest was part of the nationwide agitation programme. About 50 employees attended the demonstration in Delhi.
“The non-implementation of pay revision over these years has already had an adverse impact on the family of many,” he said, adding that employees on deputation from DoT to BSNL are already enjoying the revised pay grade.
Cost burden
BSNL had 54,875 employees as of March-end, down sharply from 183,522 employees in March 2018. The reduction in workforce can be largely attributed to the voluntary retirement scheme (VRS) in 2019 and employee transfers.
Employee costs fell to ₹7,439 crore in FY26 from ₹14,837 crore in FY18. As a share of revenue from operations, the cost declined to 35.6% from 65% over the same period. Revenue from operations stood at ₹20,919 crore in FY26, compared with ₹22,668 crore in FY18.
BSNL’s full-year loss was at ₹4,903 crore in FY26, compared with a ₹1,616 crore loss reported a year earlier.
Its board had in 2017 submitted a proposal for pay scale revision of BSNL employees, recommending 15% fitment. As per BSNL’s estimates then, the additional financial outgo on pay revision per annum for executives and non-executives with 15% fitment was ₹4,303 crore, according to a September 2025 note by All India Retired Executives’ Association.
Fitment refers to the percentage benefit used to determine an employee’s revised basic pay under a new pay scale. The four options are 0%, 5%, 10% and 15%, with the highest option providing the largest increase in basic pay.
The board sent a fresh proposal to DoT in February, according to employee union executives.
Employee associations are also demanding arrears of their revised pay from 1 January 2017, when the pay revision was due to take effect. “We do not want to remain tied down to the old pay scale, which will create serious problems in the future,” P. Abhimanyu, vice-president of BSNL Employee Union, told Mint.
“Look at the condition the government imposed on us, you cannot purchase equipment from foreign companies, you must buy from an Indian vendor…At least we should have been permitted to procure equipment from Nokia or at par with the private companies,” Abhimanyu said, adding that the quality of 4G equipment by domestic vendors is not up to the mark.
Queries emailed to and BSNL on Thursday remained unanswered.
In a 10 March letter to Prime Minister Narendra Modi, the All India Bharat Sanchar Nigam Limited Executives’ Association said BSNL operates in an exceptional and highly dynamic environment” where telecom technology changes rapidly.
“Employee compensation should be viewed as an investment in the revival of BSNL rather than merely a cost component,” the association had said, adding the company does not possess independent financial resources for acquiring advanced technologies without government approval.
Despite these challenges, BSNL has achieved positive Ebitda in the last three financial years.
However, due to other non-cash financial components, including depreciation, and finance cost, the company reported losses, it said.
In FY26, the company’s depreciation and amortisation expense rose 64% year-on-year to ₹10,372 crore owing to higher capital expenditure.
Satya N. Gupta, former principal adviser at the Telecom Regulatory Authority of India, said, “BSNL is in losses and has been operating with the support of government packages. However, if a pay revision has not been implemented for nearly a decade, it should be considered, subject to appropriate accountability measures that link employee performance to the revision,” he said.
In March, Mint reported that the Prime Minister’s Office at a review meeting with DoT described BSNL as “a human resource heavy” organization and called for efforts to reduce staff.